Types of Loans

Students who apply for financial aid at U-M by submitting a Free Application for Federal Student Aid (FAFSA) are considered for several low-interest federal loans. These loans are made available to eligible students either in their initial financial aid package or, for some undergraduates, after completing loan counseling. Families who are not eligible for these loans and/or who need additional resources to cover their student's college costs may want to apply separately for a supplemental loan through the federal government or a private lender. Alternatively, the U-M Payment Plan helps some families avoid borrowing supplemental funds. 

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When you apply for financial aid, you will automatically be considered for any of the following federal loans for which you are eligible:

  • Direct Subsidized (Stafford) Loan*
  • Direct Unsubsidized (Stafford) Loan**
  • Perkins Loan
  • Health Professions Loan
  • Nursing Loan

All of these loans are funded by the federal government and all except the Direct Unsubsidized Loan are awarded based on financial need. Your financial need, program of study, and grade level will determine the types and amounts of loans you are offered.

If you are offered one of these loans, it will appear on your financial aid award notice. (See Award Notification for information about your award notice.) If you decide that you do not want your loan (or the full amount of the loan), you may decline (cancel) it or reduce the amount of the loan in Wolverine Access by selecting Accept/Decline Financial Aid on the Awards page. If you have already received the loan funds and you decide you want to reduce or decline the loan, contact the Office of Financial Aid right away. (Parents may send an email or letter to our office, requesting that the loan be reduced or cancelled.)

You’ll find more information about these loans by following the links on this page.

* These loans are available to undergraduate students only.
** Some undergraduate students will be required to go through a separate process to obtain an unsubsidized loan, or federal loans for Spring-Summer terms.


Supplemental loans are loans you apply for on your own; they are not part of your financial aid package. Students who are not eligible for any of the federal loans listed above and/or who need additional funds to cover their college costs may want to consider applying for loans through other federal and student loan programs. The types of supplemental loans borrowed most often by U-M students are:

  • Direct PLUS Loans (from the federal government)
  • Private Education Loans (from banks and other private lenders)

These loans may be of interest to students and parents who:

  have little or no eligibility for need-based financial aid programs and need additional assistance to pay for college costs,

  have remaining financial need after other forms of financial aid have been awarded,

  are classified as nonresident students and need additional resources to fill in the gap between need-based financial aid and college costs, or

  have unusual circumstances (e.g., a medical condition) leading to costs above the standard cost of attendance budgets used by the Office of Financial Aid.

Students should compare the terms and interest rates of these loan programs carefully (see Comparing Supplemental Loans). You’ll find more information about both types of loans by following the links on this page.


Instead of taking out a loan, you may be able to pay your bill in installments. Contact the Student Financial Services Office for information on the university's interest-free monthly budget payment plan. 

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